The Under Occupation penalty (or the ‘Bedroom Tax’) affects most social
housing tenants of working age who are living in a property that, according to the Housing Benefit Office, is ‘too large’ for them. However, some tenants are not affected.

Before the Under Occupation penalty started, the Government estimated that nearly one third of working-age social housing tenants in receipt of Housing Benefit were living in accommodation “too big for their needs”. They predicted that around 670,000 working age tenants would be affected by Under Occupation, with 78% under-occupying by one bedroom, 22% by two bedrooms or more, 66% being disabled (as defined by the Disability Discrimination Act).

Does Under Occupation affect all social housing tenants whose property is considered ‘too large’?

There are certain social housing tenants who will not be affected by the penalty. The Regulations list these as:

  • Claimants of Pension Credit age, or who have a partner of Pension Credit age.
  • People in shared ownership properties.
  • Claimants living in ‘exempt accommodation’.
  • Claimants living in ‘temporary accommodation’ as defined by the Regulations.
  • A claimant whose rent has been referred to the Rent Officer, either because it’s considered unreasonably high or because the accommodation unreasonably large.

IMPORTANT: No other groups of claimants are excluded from the tax. However, there are special rules around how many bedrooms they are allowed, such as foster carers, some people who have a non-household overnight carer, severely disabled children, and people with children in the Armed Forces

Some people may also find that they are protected for a fixed period of time. The Regulations list these as:

  • For 12 months from the death of a member of the tenant’s family who had been living in their home (but not the death of a non-family non-dependant, boarder, lodger or joint tenant – unless they are the tenant’s partner), where the eligible rent used in the Housing Benefit calculation is now lower than the eligible rent before their death, due to the Bedroom Tax.
  • For 13 weeks where the tenant could afford the rent when the tenancy started without Housing Benefit, and Housing Benefit has not been claimed by the tenant or their partner in the 52 weeks prior to making a new claim.

To clarify – the Bedroom Tax affects, amongst others:

  • Single, working age Housing Benefit claimants living alone in two (or more) bedroom properties (even where a second bedroom is needed for access to children)
  • Couples living alone in two (or more) bedroom properties (even where the second bedroom is needed due to disability where there is no outside care, or for grandchildren)
  • Families with two children living in three (or more) bedroom properties where children could be deemed to share a bedroom, i.e. two same gender children aged under 16, or two aged under 10 regardless of gender.